Bitcoin Halvings: A Look at the Cycles and Their Implications Until 2028

The regular halvings of Bitcoin, in which the reward for mining is halved, have revealed discernible patterns since the cryptocurrency’s inception in 2009. Although past performance is no guarantee of future results, the consistent intervals of halvings provide valuable data points for investors. The next halving is not expected until 2028, but understanding these patterns could offer insights into potential market developments until then. Approximately every ten minutes, a new 'block' is created on the Bitcoin blockchain. Roughly every 210,000 blocks, occurring about every four years, a so-called halving takes place. During these events, the reward for miners processing transactions and securing the network is halved, thereby reducing the rate at which new Bitcoins enter circulation. When Bitcoin was introduced in 2009, the block reward was 50 BTC. The first halving in 2012 reduced it to 25 BTC, then to 12.5 BTC in 2016, and finally to 6.25 BTC in 2020. This year's halving reduced the reward to 3.125 BTC per block, lowering Bitcoin’s annual inflation rate to below 1%. This process will continue until 2140 when the last Bitcoins will be mined. Halvings are an intentional element of the Bitcoin protocol, designed to control inflation and ensure that the total amount of Bitcoin is limited to 21 million units. By reducing the rate at which new Bitcoins are created, halvings exert upward pressure on Bitcoin’s price, assuming demand remains constant or increases. Historically, this deflationary mechanism has been a significant driver of Bitcoin's price appreciation as it creates an artificial scarcity in the market. What might occur between now and the next halving in 2028? Currently, the market seems to be in a bullish trend and appears not to have reached its peak yet. Cryptocurrency analyst Benjamin Cowen compared Bitcoin price movements in the last three cycles, and his analysis suggests that the current market still has room for further growth. If past trends continue, this bull market might peak around 2025. While precise price prediction is challenging, it is plausible to assume that Bitcoin could see a significant increase from its current levels. However, every uptrend will also be followed by a downturn. As euphoric as the peaks of Bitcoin bull markets can be, the following crypto winters can be equally painful and brutal. For instance, during the last market cycle, Bitcoin fell from a peak of $68,000 to $34,000 within just two months and eventually reached a low of $16,000 in late 2022. This volatile price behavior has been consistent over past cycles and could well repeat as we approach 2026 and 2027. History, however, shows that phases of contraction are often followed by new growth phases, and there is reason to believe that 2028 could be another year where Bitcoin rises again after a crypto winter. Although no one can predict the future accurately, Bitcoin's historical patterns are hard to ignore and offer valuable insights for investors. Understanding these cycles can help investors navigate Bitcoin’s volatility and recognize it as part of an overarching trend towards higher prices over time. Even though the current bull market likely has not reached its peak yet, it will ultimately give way to a bear market. However, if history has taught us anything, it is that these periods offer opportunities to accumulate the cryptocurrency at lower prices and position investors for potential gains as the next halving approaches.